CPF: Comparison of retirement plans around the world, US, UK and Canada

You asked – we did the leg work!

We published a comparison of retirement plans around the world earlier today, and readers have asked us to compare programs with those in the UK, United States and Canada.

Here we go, enjoy!

United Kingdom

1. There is no mandatory retirement age in the UK as the government abolished it in 2011. This means that it is illegal for employers to force staff to quit upon reaching the age of 65.

2. State pension is withdrawn at the age of 65 for men born before December 6 1953 and between the age of 60 and 65 for women born after April 5 1950 but before December 6 1953.

3. Workers are allowed to withdraw pension while at pension age, even if they are still working. They also have the liberty to delay pension claims and will receive incentives and make them eligible for extra State Pension funds or a lump-sum payment upon claiming.

4. Proposal has been made by the government to increase pension age to 67 between 2026 and 2028 due to the increased average life expectancy of the population.

5. UK’s individual pension contribution is summarised by the table below:


6. Qualifying earnings’ are either:

a)     the amount you earn before tax between £5,772 and £41,865 a year

b)   your entire salary or wages before tax


United States

1. Pension age in the US ranges from 65 to 67, based on the year of birth. Individuals opting for early retirement at the age of 62 will start receiving a fraction of their full retirement pay-out.

2. There is no specific general percentage contribution of salary to the retirement fund in the US. There are basically 2 types of funds which are the defined benefit plans and defined contribution plans.

3. Defined benefit plans provide a specific benefit at retirement for each eligible employee, while defined contribution plans specify the amount of contributions to be made by the employer toward an employee’s retirement account.

4. In the federal government’s Thrift Savings Plan in 2014, where workers contribute money to their “401(k)” account, the onus is on the worker to set his own contribution for his retirement. In addition to tax breaks, many employers will match the amount workers contribute to the company 401(k) plan.



1. Pension age in Canada will gradually be raised from 65 years to 67 years, in the wake of the country’s first budget deficit since mid-1990s.

2. The country’s pension fund has 2 components, the Old Age Security (OAS) and the Guaranteed Income Supplement (GIS)

3. Canadian citizens and permanent residents who have resided for a minimum of 10 years in the country will be eligible for the OAS. The longer a person lives in Canada, the pension will increase according to the number of years of residence in the country.

4. Low-income OAS recipients will also be eligible to receive a monthly, non-taxable benefit from the Guaranteed Income Supplement.

5. Currently, the average sum of OAS pay-out is $510.21 a month. Seniors earning less than $69,562 annually are allowed a maximum pay-out of $540.12 a month. Those earning more than $112,772 cannot draw from the OAS.

6. On average, Canada’s seniors get $492.26 a month from the GIS. The maximum pay-out is set at $732.36 a month for those who make less than $16,368.

7. The employee contribution rate is only at 5% of their income, and this contribution is a far cry from the 20% rate in 1982.

8. Statistics Canada reports that in 2012, Canadians contributed to a registered retired savings plan (RRSP) for a total of $35.7 billion in contributions. A study done by the HSBC in 2013 found that fewer than 55% of respondents were prepared for retirement, partly due to the low contribution to the retirement plan.








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